ML PMD, is this true?

Welcome to the Financial Services industry and the Merrill Model.... copied by every single firm out there. MSSB, WFA, Ameriprise, EDJ, etc. But the fact that you heard it from "Ex-PMD's" would probably be true of anyone that "USE TO" work at XYZ Financial....

Disgruntled former employees rarely tell the whole story, but ML does have hurdles. So yes, you could be feeling like a victim if you smiled and dialed and got canned and the $1.5MM you brought in after a year+ gets split up after you're shown the door. If you bring in $8-10MM I doubt anyone is going to can you unless you're doing some shady business that could cause harm to the firm.

But ML did cut their entire POA/PMD program in '08 (except for a handful of FA's picked by Mgmt), just like a lot of other firms who were going through the financial melt down. So if you're talking to some of those people, I'm sure they weren't happy campers during that time frame, but it was industry wide.

I am in year 2 of the PMD program and while there are negative aspects to the program, I can't help but think this same routine goes on else where.  I smile and dial each and every day for the biggest part of my marketing, but as long as you produce (exceed hrudles) you will be fine and keep your seat.  I have seen my class dwindle by more than 96% but none of those that were cut were meeting all expectations.  I am not going to say that the cuts were easy to swallow but for a variety of reasons, the goals were not acheived.  The hurdles act as a barrier, you are either past them and suceeding or behind and in jeopardy.  You must be able to firmly grasp this and make sure that nothing stands in your way other than yourself.  Granted I am a member of a team, my situation may be different than yours so you can take this all at face value.

I was there in the 08, in the training program.  The cuts were deep, but as mentioned that was due to the need to dramatically cut costs. 

I think one would be naive to not recognize that the wirehouses factor in retention of failed trainees' books as they build their business case for:  salary paid, hurdles, bonus for said hurdles, and time to meet those hurdles. 

With that said, it would be foolish to think that ML or any other wirehouse would prefer a trainee to fail out of the program and keep the assets (1.5mil, 3mil, or whatever the peanuts number would be) than to have the trainee actually succeed, which is the ultimate goal. 

If you can bring in assets, you will be fine. 

I'm meeting with the associate director at the end of this week...I'm in New York.  I've read that 40% of new hires get to join a team.  I'll have to see for myself what's offered to me.

Bull, you are obviously doing well if you still have a seat.  What has been the biggest contribution to your success?  My plan is simple, pick a good muni, hit the phones until I reach 45 contacts per day.

[quote=newregrep]

I'm currently talking to ML right now about starting with their PMD program.  So I took it upon myself to speak to a few ex-PMDs and I've heard nothing but negative comments.

They said the PMD model is to recruit new guys to smile and dial and then can them in order to distribute new assets to veteran brokers, is this true?  They also told me this has happened many times over and over..

[/quote]

This is how all the wirehouses grow.

If management told you other wise. Do not be shocked they will lie to you over and over get use to it.  

Another tip, never trust your boss or your co-workers they are all out to get your book.

Your plan is simple and sounds about right.  I do not call on product too much unless I'm in a "F#$% It!!" mood.  My team does PIA so I call offering a second opinion, a cure to their ill, or a free coffee.  I have found success over the long term pitching appointments and I have never really been comfortable on the phone pitching a product.  These boards have great input on sample scripts for pitching product and I give major kudos to anyone who does it well.  I just play to my strengths (sit down appt.) and my team's strengths which happens to be portfolio management. 

I have averaged about 200 calls a day for over a year with more dials when I started due to more free time.  I found that when I called on decent lead lists my contact ratio 1:6 to 1:7 which got me around 35-40 contacts a day.. 45 is a great goal and if you are making that much contact you should be in line with success.  As far as the Wirehouse model it is severely inefficient. 

While the attrition rate is high, wires don't seem too have much to gain on a guy failing out.  Assume an FA makes it 1 yr before getting canned, gathering $1.5 aum and netting 30k PCs which is on the high side.  The FA was payed a salary, i'll use mine when I was hired, of $36k and benefits.  There isn't much to gain other than accounts' appreciation, annual fees but who is to say those accounts stay or are serviced by the "established FAs."  I just do not see the much value in forcing FAs out, but who am I to know.

40% in NY, or 40% in general?  That number seems way too high to me.  I'd peg it closer to 10%, and that usually isn't until AFTER you've proven yourself in some way.  That is, unless you know the advisor coming in, and were brought on with the sole purpose of joining that team.

BullRunt, are you serious about 96% failure in two years?

People contemplating this biz should look hard at that number. Do you really want to jump into something, where you have a 1 in 20 chance of making it?

1 in 20, Try the lottery.

I hear 40% in general.  I'm currently in discussion with EJ and ML.  I have no rich friends or family members.  I do have Desire, Determination, Dedication, Discipline and some clients who would follow me to the ends of the earth. 

Whether I succeed or not...who really knows? But I won't know until I give it a shot.  I'm willing to give my all to make it in this business and if I fail, atleast I can dust myself off and say "I tried my absolute best".

I'm not looking to make a quick buck here.  I'm looking for longetivity, a place where I can say I have a career.

Just curious....anybody know anyone who has made it at a wirehouse in the past two years the old fashioned way all on their own...without the benefit of getting on a team or being given the back of a book... or departing advisors clients as a start-up.

I started in the biz in the 90s and built a book calling on muni bonds, but this was before the do not call list, the days where we needed 100K to open or get paid on an account, etc..etc.......I can't think of anyone at our office that "made it" without inheriting part of a book or partnering in recent years.

I made it in PMD world for about 1.5 years.  Missed one of three hurdles by 2% and was shown the door.  I was 100% and 200% on the other two goals.  Sad, but that's the business we're in.  I was a sole practitioner.  No one in our office that was new and not on a team has made it.  Surprise!

[quote=RickRoss]

I made it in PMD world for about 1.5 years.  Missed one of three hurdles by 2% and was shown the door.  I was 100% and 200% on the other two goals.  Sad, but that's the business we're in.  I was a sole practitioner.  No one in our office that was new and not on a team has made it.  Surprise!

[/quote]

Hope you landed on your feet....that's pretty darn good for flying solo.

The new hurdle rate at ML is unrealistic IMHO. Too focused on the short term PC's and not enough on the longer term asset. 

[quote=RickRoss]

I made it in PMD world for about 1.5 years.  Missed one of three hurdles by 2% and was shown the door.  I was 100% and 200% on the other two goals.  Sad, but that's the business we're in.  I was a sole practitioner.  No one in our office that was new and not on a team has made it.  Surprise!

[/quote]

Wow...that is just down right wrong.  IF this is the case, then ML is not for me.  How can they fire somebody for being 2% behind hurdle ONCE.  I guess world is not fair and it is what it is.

I made it through the program, and often missed goals along the way.  Hit months 3,6,7,9 and 12.  Missed 4,5,8,10,11.  Could be from another factor, timing, or perhaps a regional difference. 

feebasedrep, I made it through, starting in late 07, if that makes your timeframe.  There were inherited accounts along the way from departed advisors, but not enough make a business out of (the other advisors that received them didn't make it).  I'd estimate 1mil of the 15mil necessary to graduate came from inherited business.  I did not have a senior partner, but did work with another rookie on some business.

Fly... mind sharing what you did that allowed you to make it..

[quote=squash2]

Fly... mind sharing what you did that allowed you to make it..

[/quote]

Just got a PM with the same question, here was my response:

I did some seminars, which were effective, and targeted lawyers for referrals. I was not a cold-caller. Quite honestly, I thought I "would do anything it took to succeed", and then quickly learned I was a big fat pu$$y when it came to the phone.

Seminars were good, but expensive (though I had wholesalers pick up much of the cost) and time consuming (probably less time consuming at an indy BD than ML, though as we had a ton of hoops to jump through for each seminar). If you can speak in public, and have something different to say, it is a nice way to bring in clients and gain credibility.

Prospecting lawyers is tough. It had to be the type of lawyer who had clients with money, so that is really divorce and injury lawyers. But if you can show that you can add value, and pick up 1 lawyer per year for referrals, you can build a huge practice.

Wasn't it hard to hit monthly goals with seminars.. don't those take a while to develop, then develop prospects into clients?

What were the monthly hurdles fly?  I know it depends on the base salary but let's say 50k. 

As it stands the PMD goals for $50k and under salary are:

Obviously these numbers are higher for the $50-75k path or the $75k+ path.  Each month's goals simply 1/3 of the quarterly goals.  All those numbers are on a cumulative basis.  The PCs and NNA don't mathc up which then creates the need for every trainee to sell front end products or accumulate a heck of a lot more on the NNA side.  And yes 96% of my class is gone, I started with 550 nationally and am down to 21.  It's a model built on failure but I can't do anything except produce or leave.

Flyonwall...  I am considering MSSB/ML and got offers of $75-80k base... older guy (37), career changer, top MBA in finance.  I have balked at doing it due to questioning whether I'd be a pu$$y on the phone as well.  I know I'd be better at selling a meeting vs. a product and look to build AUM not PCs.  Presumably PCs don't matter if you hit the other two thresholds... but is that true?  PCs are the actual revenue number.  Is it possible for an older person to take a more steady, polished approach?  I'd be able to bring about $2.5mm over immediately from family which would buy me some time, right?  Any thoughts would be appreciated on pacing yourself, etc.  I've read a lot of the BondGuy stuff and the 500 day war, etc.  While I would like to think I'd could do that, the fact that I have doubts leads me to believe I wouldn't do the requisite calls.  I've got a pretty big professional network.  Any thoughts on success of buying time with the immediate $$$ in the door and producing in a more organic matter.  I know a lot of people with money or that are service providers (lawyers, CPAs, etc.).

My bad, I copied from excel thinking it would work:

Los Month 3 = 4k PCs, $150k NNA, 0 NNHH: Month 6 = 10k PCs, $350k NNA, 0 NNHH: Month 9 = 18k PCs, $750k NNA, 1 NNHH: Month 12 = 30k PCs, $1.25m NNA, 2 NNHH

Month 15 = 50k PCs, $1.75m NNA, 2 NNHH: Month 18 = 70k PCs, $2.25m NNA, 2 NNHH: Month 21 = 90k PCs, $2.75m NNA, 3 NNHH: Month 24 = 115K PCs, $3.25m NNA, 4 NNHH

Month 27 = 145k PCs, $4m NNA, 4 NNHH: Month 30 = 175k PCs, $4.75m NNA, 4 NNHH: Month 33 = 210k PCs, $5.6m NNA, 5 NNHH: Month 36 = $250k PCs, $6m NNA, 6 NNHH

[quote=squash2]

Wasn't it hard to hit monthly goals with seminars.. don't those take a while to develop, then develop prospects into clients?

[/quote]

Actually, seminar clients were the quickest to close.  In one instance, a new client came the day after the seminar with a check for 200k.  But my topics were about my investment strategy, not what I usually see (asset allocation, planning, etc).   My investment strategy is a little different than the mainstream, and has a good bit of hedging built in, which certainly played well at that time. 

[quote=newregrep]

What were the monthly hurdles fly?  I know it depends on the base salary but let's say 50k. 

[/quote]

Mine were for the POA program, so the posted list above doesn't apply.  I can't remember them very well, though.

My best guess would be 2.5 mil by 6 months, 7.5mil by 12, and 15mil by 18 (there were more months of goals, but you get the point).  A portion of the assets also had to be "annuitized" (trail or recurring revenue of some sort).  Maybe 1.5 mil at 6 months, increasing to 10mil by month 18.

2.5mill by 6 months is no walk in the park, congrats on your success fly.  i was hoping to close 100k per week...

[quote=newregrep]

2.5mill by 6 months is no walk in the park, congrats on your success fly.  i was hoping to close 100k per week...

[/quote]

Thanks.  In full disclosure, I had a 750k head start with my father's pension buyout .

[quote=BullRunt]

My bad, I copied from excel thinking it would work:

Los Month 3 = 4k PCs, $150k NNA, 0 NNHH: Month 6 = 10k PCs, $350k NNA, 0 NNHH: Month 9 = 18k PCs, $750k NNA, 1 NNHH: Month 12 = 30k PCs, $1.25m NNA, 2 NNHH

Month 15 = 50k PCs, $1.75m NNA, 2 NNHH: Month 18 = 70k PCs, $2.25m NNA, 2 NNHH: Month 21 = 90k PCs, $2.75m NNA, 3 NNHH: Month 24 = 115K PCs, $3.25m NNA, 4 NNHH

Month 27 = 145k PCs, $4m NNA, 4 NNHH: Month 30 = 175k PCs, $4.75m NNA, 4 NNHH: Month 33 = 210k PCs, $5.6m NNA, 5 NNHH: Month 36 = $250k PCs, $6m NNA, 6 NNHH

[/quote]

It was mentioned earlier in the thread that these new goals were too difficult as the tilted the emphasis more towards short term production, rather than long term growth.  I couldn't agree more, but this is no accident.  ML wants to have their trainees shoulder the cost of their salary, more so than they did in the past.  For all intents and purposes, their was no PC requirement in the last program (there was, but it was "best ball" against 10mil annuitized, which was the far easier hurdle).  So in the last iteration of the program, which I came aboard with, everything was taken as a trail, there was no point in taking anything upfront.  And realistically, you were always one or two big accounts from shooting past a number of hurdles.  In this program, even when you bring a new client on, it can take quite a while for the production to start building.  That is, unless, one starts doing a lot of upfront business. 

It would shock me if the solution of choice for the ML trainee is other than a VA, paying 4.5 upfront with a meager 25bps trail.  That is the only way I see trainees hitting those lofty production goals.  The asset goals are laughable.  6MM in 36 months makes it seem so easy (I mean relative to typical training programs), but the devil is in the production.  By the time the trainee is ready to graduate the program, their book has a velocity of somewhere between 25-50bps on 6-10MM.  Call it 50bps on 10MM at 38% grid...19k per year....sweet.  Obviously it could be done differently, but this is my best guess as to how trainees are going to adapt to try to survive. 

Also of great importance.  Don't overlook the NNA and NNM metrics showing up.  Gone are the days where inherited assets could help you knock out your hurdles.  No senior FA or team member can shift assets to you to prop up your numbers.  You really do have to get a good chunk purely on your own, and I can't blame them for putting that in place. 

[quote=BullRunt]

As it stands the PMD goals for $50k and under salary are:

Obviously these numbers are higher for the $50-75k path or the $75k+ path.  Each month's goals simply 1/3 of the quarterly goals.  All those numbers are on a cumulative basis.  The PCs and NNA don't mathc up which then creates the need for every trainee to sell front end products or accumulate a heck of a lot more on the NNA side.  And yes 96% of my class is gone, I started with 550 nationally and am down to 21.  It's a model built on failure but I can't do anything except produce or leave.

[/quote]

No doubt. 

You really need to have PIA status to offer something unique to your prospects but that requires LOS 1. So, you could push annuities and munis, but at 40% payout why bother? You might as well join an insurance firm - you would probably get more training there anyway.

Even the best producers at Merrill could not make the PMD hurdles from scratch, and I will put any dollar amount on that. 

I'm an FA from the Bank of America side and I've noticed a few things about the ML PMD program since I merged into a Merrill office (I am not a PMD):

1.  The Merrill training program consists of 90% wholesaler presentations, 5% online tests, and 5% coaching from a mediocre Merrill advisor who is getting paid to do it. 

2.  I think an older, networked PMD has a better chance of success than a PMD with just a phonebook.  The Do Not Call List, which Merrill enforces, makes a huge difference.  Most PMDs have nothing to do at night except try to gather more "work" numbers for the day (which usually aren't covered by the Do Not Call rules).

3.  The attrition rate is very high.  However, it might be skewed by the 2008 meltdown when Merrill was firing everybody, everywhere.

4.  VA's only pay 2.5% upfront with an 80 bps trail.  Yes, they keep the rest.  Bank of America, with the identical annuities, paid 3.5% and a 1% trail.

5.  Everyone comes in with a lot of enthusiasm but unless you have a solid business plan, i don't see a PMD making it. This is regardless of teaming, partnering, etc.  The senior advisor can simply drop his existing PMD, keep the book (accounts are usually held jointly in a team), and pick up a new PMD.  They simply look at it as a free cold-caller.

6.  PMD's and Merrill brokers are banned from the bank branches.  This comes from way up top. So there are no easy bank referrals.

Many guys at the BOA side had it easy - not saying you did. The dirty little secret in the industry was to park your fat ass at the bank and collect the customers. Many built their books that way with connections to the middle market bankers and etc.,

The key with these lazy geeks is to see if they can keep those relationships which they never started. Odds are no. 

The guy in my office who backs me up was a BofA banker.....far from lazy....though different than the wirehouse. He covered 6 branches in a 30 mile radius, and spent days driving all over heck to ferret out small 529 plans from decent prospects for a 20-30% payout. And calling from the list of clients that had a credit card or money market at BOA to prospect new business, which he claims may sound easy, but was a heck of a lot more frustrating than trying to just call on your own some days because you were required to make a minimum number of contacts and if you didn't close or comply grid was cut. If you had a good deposit base and branches it worked, but if you were not in an affluent area, it hurt an awful lot trying to call on customers with $1000 checking accounts.

Frankly, I rememer starting with Pru Securities in 97.....200 in my trainig class that went to New York....only know of one other still in the biz....but I could still tatoo my goals on my forehead...... 12,000 in gross, $1.2MM in assets after six months to keep your job....25K in annual salary with bonus opportunities....double PC credit for annuitized business...not much different than now, and only 25% made it back at 6 months, and maybe 15% at one year.

If you can partner effectively and with a written agreement, go for it. If not, pray.

[quote=Otane]No doubt. 

You really need to have PIA status to offer something unique to your prospects but that requires LOS 1. So, you could push annuities and munis, but at 40% payout why bother? You might as well join an insurance firm - you would probably get more training there anyway.

Even the best producers at Merrill could not make the PMD hurdles from scratch, and I will put any dollar amount on that.[/quote]

Difficult, yes, but my numbers would have qualified for PMD graduation by 2 years in, and I would hardly consider myself one of the "best producers at Merrill". 

I agree with you, though, that if you basically have to push annuities to graduate, you might be better off elsewhere. 

[quote=BACFA]

I'm an FA from the Bank of America side and I've noticed a few things about the ML PMD program since I merged into a Merrill office (I am not a PMD):

1.  The Merrill training program consists of 90% wholesaler presentations, 5% online tests, and 5% coaching from a mediocre Merrill advisor who is getting paid to do it. 

2.  I think an older, networked PMD has a better chance of success than a PMD with just a phonebook.  The Do Not Call List, which Merrill enforces, makes a huge difference.  Most PMDs have nothing to do at night except try to gather more "work" numbers for the day (which usually aren't covered by the Do Not Call rules).

3.  The attrition rate is very high.  However, it might be skewed by the 2008 meltdown when Merrill was firing everybody, everywhere.

4.  VA's only pay 2.5% upfront with an 80 bps trail.  Yes, they keep the rest.  Bank of America, with the identical annuities, paid 3.5% and a 1% trail.

5.  Everyone comes in with a lot of enthusiasm but unless you have a solid business plan, i don't see a PMD making it. This is regardless of teaming, partnering, etc.  The senior advisor can simply drop his existing PMD, keep the book (accounts are usually held jointly in a team), and pick up a new PMD.  They simply look at it as a free cold-caller.

6.  PMD's and Merrill brokers are banned from the bank branches.  This comes from way up top. So there are no easy bank referrals.

[/quote]

Good post.

1.  Coudn't agree more.  I think the reason people said in the past that ML had a great training program had more to do with the competitive salary than it did with what they actually put in place to teach you.

2.  I think this is always the case, PMD or not.

3.  Attrition was incredibly high in my region even before the meltdown.  My complex's trailing 5 years showed a success rate in the low single digits.  I wasn't there before 07, but we were told the numbers.

4.  This was one of the biggest reasons I left.  Highway robbery.  ML takes a 1/3 off the top, before they put it to the grid and take 2/3.  Effective grid rate?  15%...a$$holes. 

who are you with now Fly?

[quote=newregrep]

who are you with now Fly?

[/quote]

My own RIA.  I also use a small BD for my commission based biz which takes a 10-15bps cut of that business only, not my fee-based biz.

Wow, great.  I'm not so thrilled about the interview tomorrow now, after hearing all this.  I do not want to be treated like a cattle...speaking from your experience Fly, is ML even worth it for a new guy?  I'm looking for a place to grow a business and learn a whole lot. 

I'm currently a RM for a major bank, and have been doing quite well.  But again, I work for a bank program...which means I'm very limited to what I can offer...but in return, they pay me a big salary+ annual bonus.

[quote=newregrep]

Wow, great.  I'm not so thrilled about the interview tomorrow now, after hearing all this.  I do not want to be treated like a cattle...speaking from your experience Fly, is ML even worth it for a new guy?  I'm looking for a place to grow a business and learn a whole lot. 

I'm currently a RM for a major bank, and have been doing quite well.  But again, I work for a bank program...which means I'm very limited to what I can offer...but in return, they pay me a big salary+ annual bonus.

[/quote]

Are you a bank FA or a branch /retail manager? If you are on the management side with a good salary, I  might think twice...but you need to go with your heart...or even transition to n FA role within the same bank, where if it didnt work out you would not lose your seniority and could go back.

If you are a ank FA, you likely no what you might be getting yourself into..more products no referrals, but autonomy.

[quote=newregrep]

Wow, great.  I'm not so thrilled about the interview tomorrow now, after hearing all this.  I do not want to be treated like a cattle...speaking from your experience Fly, is ML even worth it for a new guy?  I'm looking for a place to grow a business and learn a whole lot. 

I'm currently a RM for a major bank, and have been doing quite well.  But again, I work for a bank program...which means I'm very limited to what I can offer...but in return, they pay me a big salary+ annual bonus.

[/quote]

As hard as I am on them, I would still consider it, especially if you think you can do business the "right way" (not slamming every client you get into a variable annuity) and make it through their goals.  Keep in mind, though, it isn't a complete failure if you have success, but don't meet their goals.  By 15 months, I wasn't hitting the goals, but if I took my book with me to say, an indy BD, I would have been making nearly the same amount of money.  So you CAN have personal success, even if ML does not define it as success.  Don't get sucked into doing large upfront commission business at the detriment to your long-term business needs, just to meet their production hurdles. 

It felt like ML was the end game for me when I started, but I quickly turned to view it as a nice place to start a business, since the salary was good, but not necessarily my final destination.  I'd suggest building a nimble, portable book.  Do not get caught up in the "sticky client" process.  Stay away from the credit cards, checking accounts, BofA accounts, mortgages, etc.  They sell stickiness as being good for you, the lifelong employee of ML.  Really, it is mostly good for them.  Focus on the investments, shun the rest.   That is, unless/until you realize you are going to make it in the business, and you want ML to be your home for a long time. 

I f you look at MSSB be sure to get clarification on which program/side you will be on.   The training programs aren't merged yet and Smith Barney goals are 50% less acrooss all metrics(manged money,gross,AUM)

If you are looking for any training at all do not go to MSSB, here is your desk good luck.  I was let go a month ago along with along with 2 others after a year and a half even though I was exceeding expectations, one was exceeding on two of the three and the other was exceeding on one of the three. Once the MS side completely takes over the who knows what will happen.  We were told we would be able to pick which program we wanted to go in, but obviously since I was hired on the MS side that turned out not to be the case.

Looks like in reality they did me a big favor, going indy.

Feebasedrep, I'm a relationship manager for a bank.  So I handle all relationship with clients with over 250k in balances with us.  I have salary in the 80s at the moment, plus annual bonus in the growth of my book as well as quarterly bonuses for the products and investments(limited) I offer to my clients.  If I stay this route, I'll likely go into private banking..I'm also taking my CFP in march of 2011.

I wanted to get into the FA role due to my limited products I can offer and not being to provide a true solution to clients.  Plus, I do not agree at all with bank business model of shoving accounts, cards, and useless annuities down people's throats.  Having worked at a bank, I still cannot believe they are even in business...I do all my transactions at a credit union.

My goal is to first succeed as a FA, and become indy years down the road and have equity in my business.  This cannot be achieved by staying at a bank for the rest of my life. 

[quote=newregrep]

Feebasedrep, I'm a relationship manager for a bank.  So I handle all relationship with clients with over 250k in balances with us.  I have salary in the 80s at the moment, plus annual bonus in the growth of my book as well as quarterly bonuses for the products and investments(limited) I offer to my clients.  If I stay this route, I'll likely go into private banking..I'm also taking my CFP in march of 2011.

I wanted to get into the FA role due to my limited products I can offer and not being to provide a true solution to clients.  Plus, I do not agree at all with bank business model of shoving accounts, cards, and useless annuities down people's throats.  Having worked at a bank, I still cannot believe they are even in business...I do all my transactions at a credit union.

My goal is to first succeed as a FA, and become indy years down the road and have equity in my business.  This cannot be achieved by staying at a bank for the rest of my life. 

[/quote]

Makes alot of sense and is well thought out. I was hoping that maybe you were in a ban program which was fairly "ope". Some bank FAs (I think maybe Wells and smaller regionals) allow FAs to function. No relly salary, but they can offer managed programs, funds, and solutions similar to a wirehouse....won't be pitching options, but a base hopefuly big enough that you can look yourself in the mirror knowing you were doing the right thing.

Anyone have any bank experience not just pitching annuities...I actually think the old BAC model let you function as a "real" FA.

[quote=newregrep]

Feebasedrep, I'm a relationship manager for a bank.  So I handle all relationship with clients with over 250k in balances with us.  I have salary in the 80s at the moment, plus annual bonus in the growth of my book as well as quarterly bonuses for the products and investments(limited) I offer to my clients.  If I stay this route, I'll likely go into private banking..I'm also taking my CFP in march of 2011.

I wanted to get into the FA role due to my limited products I can offer and not being to provide a true solution to clients.  Plus, I do not agree at all with bank business model of shoving accounts, cards, and useless annuities down people's throats.  Having worked at a bank, I still cannot believe they are even in business...I do all my transactions at a credit union.

My goal is to first succeed as a FA, and become indy years down the road and have equity in my business.  This cannot be achieved by staying at a bank for the rest of my life. 

[/quote]

You are better off in private banking. Keep building the book at the bank while they are paying you. Don't bother with Merrill - you will be pushing BOA products in totality in a few years anyway.

[quote=Otane]

[quote=newregrep]

Feebasedrep, I'm a relationship manager for a bank.  So I handle all relationship with clients with over 250k in balances with us.  I have salary in the 80s at the moment, plus annual bonus in the growth of my book as well as quarterly bonuses for the products and investments(limited) I offer to my clients.  If I stay this route, I'll likely go into private banking..I'm also taking my CFP in march of 2011.

I wanted to get into the FA role due to my limited products I can offer and not being to provide a true solution to clients.  Plus, I do not agree at all with bank business model of shoving accounts, cards, and useless annuities down people's throats.  Having worked at a bank, I still cannot believe they are even in business...I do all my transactions at a credit union.

My goal is to first succeed as a FA, and become indy years down the road and have equity in my business.  This cannot be achieved by staying at a bank for the rest of my life. 

[/quote]

You are better off in private banking. Keep building the book at the bank while they are paying you. Don't bother with Merrill - you will be pushing BOA products in totality in a few years anyway.

[/quote]

I'm still waiting for EJ...I'll goto ML tomorrow just to not burn bridges.  I'm waiting to see what EJ can offer, so far I've heard nothing but positive things about EJ. 

Merrill will offer you a much higher base salary and solid benefits....and unlimited solutions, you just need to hit the hurdles. There are many on this board that work for EJ and can answer better than me, but I think salary is very low, no office space initially, and I am not sure when benefits kick in....aand although I am no expert, I don't think they have a totally open fee based program where you can ptich stocks, bonds, ETFs, all funds, or options if necessary. Many fail at Merrill, but you can get a salary of 50K+ while trying.

Having started at EJ, then moving to Merrill, I can easily breakdown all the differences:

EJ

- Small salary (20-25K Maybe) which decreases during the first year of production, then there are bonuses that you can watch all the assbags that got handed an office get I did get a couple of them on my own.  After the first year of production salary is gone, and then move to all commissions.  First 4 months selling goal of 5600 gross.  You will only be selling up-front A share mutual funds and bonds, or the ONLY fee based program they have Advisory Solutions.  If you like the thought of running your own office, having very unpredicatible income, being stuck in one area, and knocking on doors this is the best option for you.

ML

-Average Salary about 50-75k which if you make it through the program will last 3 years. you get a 15% quarterly bonus as long as you hit your all qualifications after 12 months 30,000 PCs 1.25MM NNA (fee based), and 2 households of 250k or more.  You can also get monthly bonuses as well, just have to do around 10,000 PCs in a month.  You can sell any share of any mutual fund and there are a few hundred different fee based platforms, larger inventory of bonds and other fixed income securities.   If you like being able to sell whatever you want, are investment savy, and know how to sell you could be fine here.

I do have mixed feelings when it comes to Jones, and most would side with me if i told the story but, i'm a very much hands on type of advisor so Merrill is a better fit.  Jones gave me the sales training, Merrill has given me much more industry knowledge.  I tried to spell it out best I could without writing a dissertation.

[quote=BudFoxofML]

Having started at EJ, then moving to Merrill, I can easily breakdown all the differences:

EJ

- Small salary (20-25K Maybe) which decreases during the first year of production, then there are bonuses that you can watch all the assbags that got handed an office get I did get a couple of them on my own.  After the first year of production salary is gone, and then move to all commissions.  First 4 months selling goal of 5600 gross.  You will only be selling up-front A share mutual funds and bonds, or the ONLY fee based program they have Advisory Solutions.  If you like the thought of running your own office, having very unpredicatible income, being stuck in one area, and knocking on doors this is the best option for you.

ML

-Average Salary about 50-75k which if you make it through the program will last 3 years. you get a 15% quarterly bonus as long as you hit your all qualifications after 12 months 30,000 PCs 1.25MM NNA (fee based), and 2 households of 250k or more.  You can also get monthly bonuses as well, just have to do around 10,000 PCs in a month.  You can sell any share of any mutual fund and there are a few hundred different fee based platforms, larger inventory of bonds and other fixed income securities.   If you like being able to sell whatever you want, are investment savy, and know how to sell you could be fine here.

I do have mixed feelings when it comes to Jones, and most would side with me if i told the story but, i'm a very much hands on type of advisor so Merrill is a better fit.  Jones gave me the sales training, Merrill has given me much more industry knowledge.  I tried to spell it out best I could without writing a dissertation.

[/quote]

Fantastic Post!

Just finished ML meeting today.  Met with two associate directors and everything went very well.  They were very pleased with me.  I have to come up with a business plan next week and present it to the directors. 

The associate directors said if the goals are not met for 1 month, they don't hound or fire anyone, but if they are consistently not being met, they will show you the door.

The goals were 30MM assets after 3 1/2 years.  There's 180 advisors working out of the office, it is the biggest ML branch in the country right now.

The ML model prevents you from building a sustained business IMHO. If they went back to their old model of NNA then I think they have a chance, but as I stated before, if you are selling annuities or front end product you are better off with an insurance company at almost twice the payout. 

I know this is a late post but I have an interview with ML and need to show them a business plan. Any help with this would be greatly appreciated. I'm not asking for a copy and paste just ideas on structuring. I'm very new to this so any help would be aprreciated. 

Nothing wrong with a late post, at least you're on topic and I'm assuming you've read this thread.

I would show a business plan that is 90% about how you'll acquire new clients: cold calls, networking, seminars, etc. Google the topic and I'm sure there are a dozen hits on marketing ideas.  

Don't even bother talking about investment "strategies" or technical analysis.  Between Merrill, US Trust, and Bank of America, there are enough stock analysts to open fifty mutual funds.

Good luck.

[quote=joshsp87]

I know this is a late post but I have an interview with ML and need to show them a business plan. Any help with this would be greatly appreciated. I'm not asking for a copy and paste just ideas on structuring. I'm very new to this so any help would be aprreciated. 

[/quote]

Try and think back on the interview process and ask yourself if the hiring manager has talked about the value that the relationship with BofA brings to Merrill FA's. If you remember hearing it then consider working the BofA partnership into your plan. Check these out:

http://www.totalmerrill.com/TotalMerrill/pages/ArticleViewer.aspx?TITLE=loanmanagementaccount

https://www.fs.ml.com/publish/new_articles/LMA_03092009.html?cpao=LMAML&cpca=Logout

http://www.mlcc.com/MLHL/TopNavigation/OptionalFeatures/LoanProcess.htm

Obviously, if you got a negative feeling about BofA from your hiring manager stay away from the subject.

The main thing the hiring manager wants to know is how you are going to meet your hurdles and that you are 100% sold-out to doing so.

There has to be an easier way. 

A few questions on ML PMD--

Are PC's/NNH/NNA cumulative or Trailing 12 numbers?

NNA = Net New Annuitized (ie: fee based only counts) or Net New Assets?  Also, do annuities/C shares/ etc count towards Annutized?

How long is pre-production?

FB:
I would check out the Rookies Forum on this site, there are some good threads about ML PMD.

I don’t have the Plan in front of me but I believe the following answers are correct:

[quote=FB 41]

A few questions on ML PMD--

Are PC's/NNH/NNA cumulative or Trailing 12 numbers?

NNA = Net New Annuitized (ie: fee based only counts) or Net New Assets?  Also, do annuities/C shares/ etc count towards Annutized?

How long is pre-production?

[/quote]

NNAA - Net New Annuitized Assets
NNH - Net New Households >=$250k (exempting some account types)

currently thinking of career change...

Does ML have minimum PC after PMD, like year 4, 5? or once you graduate PMD, you are safe?

[quote=BullRunt]

My bad, I copied from excel thinking it would work:

Los Month 3 = 4k PCs, $150k NNA, 0 NNHH: Month 6 = 10k PCs, $350k NNA, 0 NNHH: Month 9 = 18k PCs, $750k NNA, 1 NNHH: Month 12 = 30k PCs, $1.25m NNA, 2 NNHH

Month 15 = 50k PCs, $1.75m NNA, 2 NNHH: Month 18 = 70k PCs, $2.25m NNA, 2 NNHH: Month 21 = 90k PCs, $2.75m NNA, 3 NNHH: Month 24 = 115K PCs, $3.25m NNA, 4 NNHH

Month 27 = 145k PCs, $4m NNA, 4 NNHH: Month 30 = 175k PCs, $4.75m NNA, 4 NNHH: Month 33 = 210k PCs, $5.6m NNA, 5 NNHH: Month 36 = $250k PCs, $6m NNA, 6 NNHH

[/quote]

You're never really "safe" at Merrill or any other wire. You will work in a perpetually charging environment and never really own your book. Great career if you can survive though...

At major wires (MSSB, ML, etc.), if you are out of the training program, rarely do they lay off people in production (unless you are really underperforming), basically they just cut your payout so low that you can't afford to live (commonly referred to the "Penalty Box")-- ie: if you are producing under 200k after being in production for 5 years, your payout gets cut to 20% or some ridiculous number like that.  From this point, I have seen advisors in this situation either go to an Independent, smaller local firm, or an Ameriprise, etc. so they can produce at the same level and get a more realistic payout, or just get out of the business.  Anyone who has ever spoken to our training class has basically said if you're not making 100k per year (about 250k in Gross) by the time you are 3-5 years in the business, it's not worth the stress -- way too many other jobs out there that are much easier for that income level. 

[quote=DTA]

You're never really "safe" at Merrill or any other wire. You will work in a perpetually charging environment and never really own your book. Great career if you can survive though...

[/quote]

Ture on all counts.

I am comparing regional and Merrill. According to On Wall Street, ML's payout grid requires 400+ production to have 40% ratio, but some regional B/D has easier payout grid for rookies. Does anyone know production required to get 40% at ML for the first 5 years? Is it 400+ for 2, 3, 4 year FAs? or they have different payout grid?

[quote=BullRunt]

My bad, I copied from excel thinking it would work:

Los Month 3 = 4k PCs, $150k NNA, 0 NNHH: Month 6 = 10k PCs, $350k NNA, 0 NNHH: Month 9 = 18k PCs, $750k NNA, 1 NNHH: Month 12 = 30k PCs, $1.25m NNA, 2 NNHH

Month 15 = 50k PCs, $1.75m NNA, 2 NNHH: Month 18 = 70k PCs, $2.25m NNA, 2 NNHH: Month 21 = 90k PCs, $2.75m NNA, 3 NNHH: Month 24 = 115K PCs, $3.25m NNA, 4 NNHH

Month 27 = 145k PCs, $4m NNA, 4 NNHH: Month 30 = 175k PCs, $4.75m NNA, 4 NNHH: Month 33 = 210k PCs, $5.6m NNA, 5 NNHH: Month 36 = $250k PCs, $6m NNA, 6 NNHH

[/quote]

The entire industry is F'd up.  If your production is less than $500K you're miserable.  Once you're $500K it's good.

Not 100% sure, but I think you get a break your first 5 years. 47% payout while in PMD (year 1-3... but remember there is a draw) and 40% from year 4-5.  After 5 years if you are not producing at a certain level (is it 400k?), you take a cut in payout percentage if your production isn't over that number.

So do they have 40% payout regardless of production in year 4-5? or do they still have minimum production requirement for rookies to get 40% payout in year 4-5?

[quote=FB 41]

Not 100% sure, but I think you get a break your first 5 years. 47% payout while in PMD (year 1-3... but remember there is a draw) and 40% from year 4-5.  After 5 years if you are not producing at a certain level (is it 400k?), you take a cut in payout percentage if your production isn't over that number.

[/quote]

The goal are pretty lofty in my opinion. Especially in a target market that has under 100 people with $2mm+ in their retirement.

With that said, I love the program and I think the goals themselves are fair. HOWEVER, I would rather take a salary cut earlier and have my goals start later in the long run. Big money generally moves slow and to be given 4 months to learn how to prospect, begin prospecting and start moving accounts is not a ton of time. For anyone with prior experience in the industry, I think the numbers are perfectly in line, but for a complete new hire in the industry, a 6 month grace period would be better for the PMDs and I think better for the company long term.

The only other gripe I would consider is that the goals don't factor in the products you're putting your clients in. In theory, you could have $1mm of managed money and fail out of the program before another PMD who does $250k in A-shares. All in all I'm very impressed with the PMD program and for that to be my only gripe...I'd say it's not a bad situation.

what is PMD>?

[quote=therightadvisor]

The goal are pretty lofty in my opinion. Especially in a target market that has under 100 people with $2mm+ in their retirement.

With that said, I love the program and I think the goals themselves are fair. HOWEVER, I would rather take a salary cut earlier and have my goals start later in the long run. Big money generally moves slow and to be given 4 months to learn how to prospect, begin prospecting and start moving accounts is not a ton of time. For anyone with prior experience in the industry, I think the numbers are perfectly in line, but for a complete new hire in the industry, a 6 month grace period would be better for the PMDs and I think better for the company long term.

The only other gripe I would consider is that the goals don't factor in the products you're putting your clients in. In theory, you could have $1mm of managed money and fail out of the program before another PMD who does $250k in A-shares. All in all I'm very impressed with the PMD program and for that to be my only gripe...I'd say it's not a bad situation.

[/quote]

I completely agree.

Starting my new FA career at ML through the PMD program and was asked to sign a "agreement to repay costs of Training" form... Anybody have any familiarity with this form?  It says if my employment ends with 36 months of getting my production number I can be forced to pay them back.  As much as $25K if we part ways in months 9-12.  I might have to go stick with one of the insurance companies....

Thanks for your input.  I was starting to see it the same way, I just wanted to believe that they were investing in me and my abilities with a mutual goal of making ME a success.  I have another offer from an insurance company, that will allow me to do AUM and pay me 85bps. That means that even if I meet the ML requirements and pass the production hurdles, why woiuld I want to do it at a company that will only pay me 40-47bps. Especially with that big payback balloon floating over my head the whole time.

[quote=theranman]

Thanks for your input.  I was starting to see it the same way, I just wanted to believe that they were investing in me and my abilities with a mutual goal of making ME a success.  I have another offer from an insurance company, that will allow me to do AUM and pay me 85bps. That means that even if I meet the ML requirements and pass the production hurdles, why woiuld I want to do it at a company that will only pay me 40-47bps. Especially with that big payback balloon floating over my head the whole time.

[/quote]

Looking with hindsight I would take the offer I had from the mutual life company that is like the one you mention. The first 6-9 months would be much harder but after that it would be better. I would take one of those intensive week long Series classes and just bear down and get it over with. 

If you are young you will find that younger people  need to talk to someone about life insurance so there is a lot of opportunity there. Selling life insurance as a stand alone sale at ML is a chore. You have to open a brokerage account and there are account fees in the second year. And, ML keeps all of the renewals on term policies for themselves. You get nothIng. 

You will find that life insurance will keep your head above water while the investment side is launching. 

I thought I was going to get access to things like IPO's at Merrill. Think again. The allotment is done on the basis of production. As a PMD you will find IPO shares hard to come by. You are not  goIng to be able to cold call for IPO shares of Facebook as an example. 

At the life company you will be a 1099 worker. You can set up all kinds of tax advantages for yourself. And, you won't have a beureaucrat watching your every movement. 

As far as the Merrill brand, it will work against you as often as it works for you. 

This company lost its way decades ago. It's not what it was. It's a rich kid's club now. 

I have been offered a position in the PMD program. I have been in public accounting for 6 years, but don’t really like accounting. I was approached by a local branch manager for ML. Everytime I talk to him, I think that I want to do this and how great it sounds, but everything I have read makes it sound like reaching the goals is near impossible. I have a few questions for anyone in the program that may want to help me out:

Did you all find that the recruiters treated you like you were going to be great and really had all the right qualities almost like you were being sold the position.

I have a pretty good network in the area I live, but do not think I would like calling friends of friends and being pushy. Not that I dont feel comfortable on the phone, but I know how I would feel if someone I knew of but did not know was blowing me up asking me to put a large chunk of money under their advisement. I have no problem whatsoever cold calling or talking and meeting people that I know, but are you required to prospect anyone and everyone you know has money.

Are you in a cubicle where all the advisors can hear you calling all day? This may sound stupid, but I would feel alot more comfortable knowing I dont have a senior advisor critiquing every phone call I make, or just getting bored and listening so he can laugh.

I have been told that if they keep my salary under 50, that my hurdles or goals do not come as fast and there is more time to meet them. Anyone else heard this?

I have asked him repeatedly about not meeting goals and being fired without warning. His response has been almost laughing at the idea and saying if it is not working, they will coach you out basically telling you to leave, but not showing up with a pink slip and telling you to clear off your desk.

How do you go about joining someone’s team or was this mentioned to any of you pre-program? I have told this this guy no and he wouldnt take no for an answer. He had me talk to one of his team meambers who was younger than I was and had many of the same concerns. I am assuming he wasnt meeting his goals, but the older guy like him and asked him to join.

Any repsonse to any of the questions would be much appreciated. I will be leaving a fairly well paying accounting job that I could not get fired from if I tried and it sounds like I may just be jumping off a bridge and hoping to get lucky and land a few big accounts. I have very limited investment or sales experience, however, I do have a good bit of experience talking with people about their finances.

I came from an public accounting firm too (PWC) and made the jump. Yes, I’m in a cubicle a lot of the day and people can hear me dial. My network hasn’t worked out because a lot of people want to keep their advisor and their accounting seperate. I am having to build it cold. The recruiters blow smoke up your butt.

Here’s how it goes meeting goals: You have 6 months, if you’re not on goal for one month you get 90 days to get back on goal or you’re fired.

You will need to prospect people you know. If you are shy about this, it’s not for you. If your salary is under 50, the hurdles are slightly less. But you will need to spend money to make money, so don’t worry about that, get the higher salary and spend it on prospect lunches and dinners. The hurdles come the same speed no matter what your salary, they are monthly now (used to be quarterly). You won’t be fired without warning, but you may get one month probation to turn it around. Maybe they will give you 3 months, but it often takes 3 months to transform a great prospect into a client, plus get the paperwork done, and then the PC’s may be spread out and you only get 25% of them this quarter. Also, not all teams are the same. Many teams are Sr FA’s looking to get a piece of the pie, they won’t send much your way. I think, judging by your post, that accounting is a better spot for you. I say with great respect: it takes a ruthless salesman to make it right now.

You will need to prospect people you know. If you are shy about this, it’s not for you. If your salary is under 50, the hurdles are slightly less. But you will need to spend money to make money, so don’t worry about that, get the higher salary and spend it on prospect lunches and dinners. The hurdles come the same speed no matter what your salary, they are monthly now (used to be quarterly). You won’t be fired without warning, but you may get one month probation to turn it around. Maybe they will give you 3 months, but it often takes 3 months to transform a great prospect into a client, plus get the paperwork done, and then the PC’s may be spread out and you only get 25% of them this quarter. Also, not all teams are the same. Many teams are Sr FA’s looking to get a piece of the pie, they won’t send much your way. I think, judging by your post, that accounting is a better spot for you. I say with great respect: it takes a ruthless salesman to make it right now.

Ditto.

[quote=Ulairi]I came from an public accounting firm too (PWC) and made the jump. Yes, I’m in a cubicle a lot of the day and people can hear me dial. My network hasn’t worked out because a lot of people want to keep their advisor and their accounting seperate. I am having to build it cold. The recruiters blow smoke up your butt.

Here’s how it goes meeting goals: You have 6 months, if you’re not on goal for one month you get 90 days to get back on goal or you’re fired.[/quote]

Yup.

[quote=newregrep]

Feebasedrep, I’m a relationship manager for a bank.  So I handle all relationship with clients with over 250k in balances with us.  I have salary in the 80s at the moment, plus annual bonus in the growth of my book as well as quarterly bonuses for the products and investments(limited) I offer to my clients.  If I stay this route, I’ll likely go into private banking…I’m also taking my CFP in march of 2011.

I wanted to get into the FA role due to my limited products I can offer and not being to provide a true solution to clients.  Plus, I do not agree at all with bank business model of shoving accounts, cards, and useless annuities down people’s throats.  Having worked at a bank, I still cannot believe they are even in business…I do all my transactions at a credit union.

My goal is to first succeed as a FA, and become indy years down the road and have equity in my business.  This cannot be achieved by staying at a bank for the rest of my life. 

[/quote]

Makes alot of sense and is well thought out. I was hoping that maybe you were in a ban program which was fairly “ope”. Some bank FAs (I think maybe Wells and smaller regionals) allow FAs to function. No relly salary, but they can offer managed programs, funds, and solutions similar to a wirehouse…won’t be pitching options, but a base hopefuly big enough that you can look yourself in the mirror knowing you were doing the right thing.

 

Anyone have any bank experience not just pitching annuities…I actually think the old BAC model let you function as a “real” FA.